Do You Have A Formal Estate Plan?

Unless Congress acts before Jan. 1, the federal estate tax will drop from an individual exemption of $5 million and a 35% tax rate to a $1-million/individual exemption and a 55% tax rate. This week's online poll questionis: "Does your operation have a formal plan designed to minimize estate taxes?"

After voting, leave your thoughts on the importance of estate planning and the federal estate tax in the comments section.

Yes

No

Don't know

Discuss this poll 12

Anonymous

on Feb 25, 2014

Having read all of the comments which I understand & believe. When our government makes the rules and changes them to fit the government its time to change the government.

After Mariei Scott died leaving thousands of acres in Ouray County, CO, to her relatives, my mother said, "The only ones who will get anything are the government and the attorneys." Ralph Lauren's fancy spread is just one of the legacies of that hard working cattlewoman.
My mother throught she had planned ahead but our ranch, valued at $10,000 an acre because of "scenic value", is going to be put up for sale. After almost 10 years of trying to find a way to hang on to it, we finally sold part of the ranch to a neighbor last year for 50 cents on the dollar and it wasn't nearly enough to pay off the IRS. Our attorney says, "It's the only way."
Can you tell I'm bitter? You would not believe how it has aged my son and me.

The Obama voters helped us all out with this one, there is no doubt about that. One of our problems is that the people who vote for a living outnumber those of us who work for a living.

Thomas Jefferson said it well when he said, "A democracy ceases to exist when half of the people don't want to work and expect the working half to support them".

Obama is the only president that we have ever had who openly talks about the "redistribution of wealth". Let's face it, --- the redistribution of wealth is COMMUNISM! It is a well known fact that you cannot build up the poor by tearing down the rich! And when the poor get an even share of the wealth and then dawdle it away you can well bet that they will again want a new redistribution effort. Socialism has never worked and never will but it appears that we are now faced with it in a terrifying way.

We at present do not have a written plan just a will to leave it to our children. Recently my husband became very sick and died now it is all up to me to get some plan in action. Am looking for the best way to leave everything to them with the least inheritance expense. We put things off too long and now it is totally up to me to deal with as a single person. He was not old and this could happen to anyone. Any suggestions would be appreciated.

No at this time I do not have a written plan. I' m trying to wait
and see what is going to happen with the Estate Tax situation.
When I see what new laws may emerge, then I will know how to plan. Knowing that even the new laws may change, one may have to go back and make changes in their Estate Plan every so often.

It doesn't take much of an operation to be worth over 2 million these days. Our assets are in the land and not the bank, but these assets are an investment for the future generations to stay in business, but with the new exemptions/tax rate it will drive many of us from our heritage and give it to the government.

The gov't giveth and the gov't taketh away! My grandfather was able to file on a homestead around 1900. By the time my father was 21, there wasn't any so-called good land or cropland available to file on, but he signed on for 80 or 120 acres of mountainous terrain. He broke horses, sold them until he was able to"prove up" on certain improvements eg: fences, watering holes, etc. Then he sold that land to a more established neighbor for a small amount of $, relative to today's $. With that $ he leased a 360 acre or so farm in 1915. Got married in 1916 and in 1920 decided to buy a neighboring farmstead because it was only 1 and 1/2 miles from a rural school which was 14 miles from the nearest town. (Now there were 3 children and a fourth on the way!) Parts of that picture are still relatively easy, but not the education part. In the meantime, my Dad had continued to take care of his own small herd as well as take care of his brother's cow herd (probably 20 cows or so and some more heifers coming into the herd,) The brother was not married and was fighting in France in WWI. My Dad paid $35/ac
in 1920, and the depression hit in 1929. During the dry and dirty '30's, the bank had to put his land and mortgage up for bid. The family (numbering 7 children by this time) existed by gardening, milling their grain for flour, butchering their own hogs, (beef was still more valuable than pork) and since there weren't any deer left in the country (hunger trumped poaching laws), the yearlings and 2 yr old steers were one of the only saleable commodities.
I was born in 1940 when times were getting better. By some standards, I was born with a silver spoon in my mouth. (My wife sure doesn't think so!) There were 10 years between the youngest sibling and me. My mother tried to give me a playmate until the Dr. told her to quit trying. One brother died during those dirty 30's, but she still thought about family.
I am just completing a gifting program. The same land the family stayed on simply because no one wanted or couldn't pay $5/acre is now worth $1,200-1,500/acre. I don't believe I will see the land return that much money, but I'm gifting the main place to my son and his wife because the law allows it without a lot of extra taxes. Simultaneously, we are purchasing $500,000 worth of recreation priced land which borders us, simply because the opportunity presented itself. I guess this is our private conservation easement program! In my lifetime, we have only been able to accumulate 50% of the $ it is taking to buy this land. That's a pretty sad commentary to Agriculture, when coastal based individuals are able to double their money on a so-called piece of ag land and return to the coast to spend it and maybe enjoy it. Many people have a lot more at stake than we do, but the gifting portion could go away, considering the fiscal problems of the country. My son and I will continue to operate in a partnership to complete some of the transitioning. I simply view this as an opportunity that could vanish with the stroke of a pen.